EssilorLuxottica SA (EL) AI Stock Analysis

• Market Cap: €144.77B
• Dividend Yield: 1.26%
• Average Volume (3M): 420.79K
• Price to Earnings (P/E): 60.1
• Beta (1Y): 0.96
• Revenue Growth: 5.45%
• EPS Growth: 2.86%
• Country: FR
• Employees: 153,498
• Sector: Consumer Cyclical
• Sector Strength: 84
• Industry: Medical - Instruments & Supplies
• EPS (TTM): 3.00
• Shares Outstanding: 463,145,540
• 10 Day Avg. Volume: 450,041
• 30 Day Avg. Volume: 420,785
• PEG Ratio: 25.74
• Price to Book (P/B): 2.65
• Price to Sales (P/S): 4.03
• P/FCF Ratio: 31.90
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: €303.40
• Price Target Upside: -3.19% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 11

• Rating: 68 Neutral
• Price Target: €339.00 ▲(8.17% Upside)

EssilorLuxottica SA's strong financial performance is the primary driver of its overall stock score, supported by consistent revenue growth and robust profitability. However, technical indicators suggest the stock is currently overbought, which could lead to a short-term correction. The high P/E ratio indicates potential overvaluation, which tempers the overall score. The absence of earnings call insights and corporate events means these factors do not influence the score.

Positive Factors

Acquisition of Ikerian AG

The acquisition of Ikerian AG enhances EssilorLuxottica's capabilities in AI and data management, strengthening its position in the med-tech sector. This strategic move is likely to drive innovation and improve patient care, offering long-term competitive advantages in the eyecare industry.

Revenue Growth

Consistent revenue growth indicates robust demand for EssilorLuxottica's products and services. This trend reflects successful market strategies and product offerings, supporting long-term business sustainability and market leadership.

Strong Cash Flow

Efficient cash flow conversion ensures that EssilorLuxottica can fund operations and investments without relying heavily on external financing. This financial strength supports strategic initiatives and enhances resilience against market fluctuations.

Negative Factors

Asset Utilization

While EssilorLuxottica maintains a stable balance sheet, there is room for improvement in asset utilization. Optimizing asset use could enhance operational efficiency and profitability, which is crucial for sustaining competitive advantage.

Modest Free Cash Flow Growth

Modest growth in free cash flow may limit EssilorLuxottica's ability to invest in new opportunities or return capital to shareholders. This could impact long-term growth prospects if not addressed through strategic financial management.

High P/E Ratio

A high P/E ratio could indicate market expectations for significant growth, but it also poses a risk if the company fails to meet these expectations. This valuation concern may limit stock price appreciation and investor appeal over the long term.

EssilorLuxottica SA Business Overview & Revenue Model

Company Description

EssilorLuxottica Société anonyme designs, manufactures, and distributes ophthalmic lenses, frames, and sunglasses in North America, Europe, Latin America, Asia, Oceania, and Africa. It operates in five segments: Wholesale, Retail, Lenses and Optical Instruments, Equipment, and Sunglasses and Readers. The Wholesale segment engages in the manufacture and wholesale distribution of luxury and sports eyewear. The Retail segment retails luxury and sports eyewear. The Lenses and Optical Instruments segment offers lenses and small equipment, including Varilux progressive lenses; Crizal antireflective, anti-smudge, and antistatic lenses; Transitions photochromic lenses; Eyezen lenses for users of computers, tablets, smartphones, and other connected devices; Xperio polarized sun lenses; and Nikon and Kodak corrective lens brands. It also provides lens edging and mounting instruments for opticians and prescription laboratories; optometry instruments for eye care professionals, schools, occupational medicine centers, military, and other institutions; and Transitions Signature Gen 8 photochromic lens, as well as develops solutions for online sales of optical products. The Equipment segment offers digital surfacing machines and lens coating machines to prescription laboratories, integrated optical chains, and lens manufacturers. The Sunglasses and Readers segment provides non-prescription sunglasses and reading glasses under the Foster Grant, Gargoyles, Magnivision, Corinne McCormack, Monkey Monkey, Ryders Eyewear, and SolarShield brands; Reebok, Steve Madden, Betsey Johnson, Nine West, Dockers, French Connection, Ironman, Rawlings, Bodyglove, Panama Jack, Marvel, and Disney; Bolon, Molsion, Qina, and Prosun brands; and Mujosh and Aojo brands. It has a network of 490 prescription laboratories and edging-mounting facilities. The company was formerly known as Essilor International Société Anonyme and changed its name to EssilorLuxottica Société anonyme in October 2018. EssilorLuxottica Société anonyme was founded in 1849 and is headquartered in Paris, France.

How the Company Makes Money

EssilorLuxottica generates revenue through multiple key streams. The largest segment comes from the sale of ophthalmic lenses, which includes premium and customized lens solutions designed to enhance vision. Additionally, the company earns significant income from its extensive portfolio of eyewear brands, which includes both luxury and mass-market labels. Retail operations also contribute substantially to revenue, with a wide network of optical retail chains and e-commerce platforms. Strategic partnerships with healthcare professionals and organizations further enhance their market presence. The company leverages innovation and technological advancements in lens manufacturing, driving demand for premium products, and capturing a growing market share in the eyewear industry.

EssilorLuxottica SA Financial Statement Overview

Summary

EssilorLuxottica SA presents a comprehensive financial profile with consistent revenue growth, strong profitability, and effective cash flow generation. The income statement reveals solid margins, and the balance sheet shows stability with moderate leverage. However, there is potential to improve asset utilization.

Income Statement

EssilorLuxottica SA shows a strong revenue growth trend with a 4.37% increase from 2023 to 2024. The company maintains solid profitability, evidenced by a gross profit margin of 63.41% and a net profit margin of 8.90% in 2024. The EBIT margin of 13.01% and EBITDA margin of 24.72% further underscore its robust operating performance. Consistent revenue growth and strong margins highlight a well-managed income statement.

Balance Sheet

The company has a healthy equity base with a debt-to-equity ratio of 0.33, indicating moderate leverage. The return on equity (ROE) is a respectable 5.84%, suggesting efficient use of equity capital. The equity ratio stands at 62.84%, reflecting a strong balance sheet with significant equity backing. Overall, the balance sheet exhibits stability, though there is room for improving asset utilization.

Cash Flow

EssilorLuxottica SA demonstrates a stable cash flow position with a free cash flow to net income ratio of 1.42, indicating strong cash generation relative to net income. The operating cash flow to net income ratio is 2.07, highlighting efficient cash conversion. Free cash flow growth was modest at 0.66% from 2023 to 2024, but the overall cash flow metrics suggest solid liquidity and operational cash control.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	27.24B	26.51B	25.39B	24.49B	19.82B	14.43B
Gross Profit	17.01B	16.81B	16.05B	15.59B	12.28B	8.49B
EBITDA	7.24B	6.55B	6.18B	6.10B	4.71B	2.61B
Net Income	2.38B	2.36B	2.29B	2.15B	1.45B	85.00M
Balance Sheet
Total Assets	61.93B	64.26B	60.52B	60.56B	59.41B	52.32B
Cash, Cash Equivalents and Short-Term Investments	2.79B	2.25B	2.56B	1.99B	3.33B	8.93B
Total Debt	14.05B	13.22B	11.66B	12.20B	13.02B	11.89B
Total Liabilities	23.52B	23.26B	21.63B	22.41B	23.54B	19.52B
Stockholders Equity	37.82B	40.38B	38.24B	37.45B	35.06B	32.27B
Cash Flow
Free Cash Flow	3.36B	3.35B	3.33B	3.21B	3.52B	2.30B
Operating Cash Flow	4.91B	4.87B	4.86B	4.78B	4.54B	2.95B
Investing Cash Flow	-3.91B	-3.62B	-1.72B	-3.29B	-8.13B	-574.00M
Financing Cash Flow	-140.00M	-1.65B	-2.36B	-2.91B	-1.97B	1.59B

EssilorLuxottica SA Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 313.40
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FR:EL, the sentiment is Positive. The current price of 313.4 is above the 20-day moving average (MA) of 287.34, above the 50-day MA of 275.10, and above the 200-day MA of 259.44, indicating a bullish trend. The MACD of 11.39 indicates Negative momentum. The RSI at 73.87 is Negative, neither overbought nor oversold. The STOCH value of 88.71 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for FR:EL.

EssilorLuxottica SA Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
MC	78 Outperform	€305.97B	27.83	16.88%	2.12%	-3.24%	-21.24%
RMS	78 Outperform	€229.59B	51.33	27.36%	1.19%	10.31%	0.54%
CDI	76 Outperform	€102.83B	22.57	19.54%	2.28%	-3.24%	-21.65%
EL	68 Neutral	€144.77B	60.07	6.19%	1.26%	5.45%	2.86%
KER	68 Neutral	€40.66B	55.78	4.91%	1.81%	-14.56%	-64.91%
Sector *	61 Neutral	$18.38B	12.79	-2.54%	3.03%	1.52%	-15.83%